Banks may not respond to RBI rate cut, if any

RBI had kept the repo rate unchanged at 6.25% in its December policy review

After having effected a sharp cut in marginal cost-based lending rates (MCLR) in January, banks are unlikely to go a further rate reduction even if the Reserve Bank of India brings down the lending rate on February 8.

Banks, mostly public-sector banks, are reeling under heavy credit costs and low loan growth and are worried about protecting margins and profitability. Senior State Bank of India executives said bank might not revise rates in the near term even if RBI reduces the policy rate in its monetary policy review.

RBI had kept the repo rate unchanged at 6.25 per cent in